The U.S. remains locked in a “deep and broad recession.” Every major housing trend indicates “a market that is likely to decline even more.” More specifically, house prices in 20 major cities fell to April 2009 levels, their lowest yet, based on the latest Standard & Poor’s/Case-Shiller home price report. Moreover, a Census Bureau report shows that “new home sales in March remained near their lowest levels since records were first kept in 1963.” An “all-out effort” is needed to put people back to work and stop foreclosures, but this looks unlikely. “Without a healthy housing market, there cannot be a healthy economic recovery.”
http://www.nytimes.com/2011/04/27/opinion/27wed2.html?partner=rssnyt&emc=rss

The U.S. remains locked in a “deep and broad recession.” Every major housing trend indicates “a market that is likely to decline even more.” More specifically, house prices in 20 major cities fell to April 2009 levels, their lowest yet, based on the latest Standard & Poor’s/Case-Shiller home price report. Moreover, a Census Bureau report shows that “new home sales in March remained near their lowest levels since records were first kept in 1963.” An “all-out effort” is needed to put people back to work and stop foreclosures, but this looks unlikely. “Without a healthy housing market, there cannot be a healthy economic recovery.”
http://www.nytimes.com/2011/04/27/opinion/27wed2.html?partner=rssnyt&emc=rss

Time calls it “the China Effect.” As China prospers and internal demand generates an ever larger share of economic growth, low-skill manufacturing is being shifted to other Asian countries, including Vietnam, Bangladesh, Malaysia and Thailand. “After ferociously sucking jobs and investment out of Southeast Asia over the past two decades, the China Effect is now lifting once declining industrial hubs like Penang out of their long economic slump.” The era with China as the world’s factory is beginning to come to an end.

Time calls it “the China Effect.” As China prospers and internal demand generates an ever larger share of economic growth, low-skill manufacturing is being shifted to other Asian countries, including Vietnam, Bangladesh, Malaysia and Thailand. “After ferociously sucking jobs and investment out of Southeast Asia over the past two decades, the China Effect is now lifting once declining industrial hubs like Penang out of their long economic slump.” The era with China as the world’s factory is beginning to come to an end.

Profitability is expected to suffer at firms listed on the Tokyo Stock Exchange’s first section. According to Barclays Capital, average net profit “will fall 12 percent this financial year, with the slide led by export-related industries such as auto and electronics firms.” Markets may already have factored this into share prices. There may even be some upside. “Some investors are encouraged by the speed at which power generation capacity has recovered since the quake, and initial plans to force large users to cut back by a quarter may be eased.” In addition, there are hopes that later in the year supply chains will stabilize and consumption will benefit from rebuilding and relief efforts.Profitability is expected to suffer at firms listed on the Tokyo Stock Exchange’s first section. According to Barclays Capital, average net profit “will fall 12 percent this financial year, with the slide led by export-related industries such as auto and electronics firms.” Markets may already have factored this into share prices. There may even be some upside. “Some investors are encouraged by the speed at which power generation capacity has recovered since the quake, and initial plans to force large users to cut back by a quarter may be eased.” In addition, there are hopes that later in the year supply chains will stabilize and consumption will benefit from rebuilding and relief efforts.

The federal government still owns a quarter of GM’s common stock and over 90% of AIG. These purchases and other bailout measures saved both the automaker and the insurer. Some may urge the U.S. Government to hold its shares until a better market arrives. AIG’s stock price has fallen 25% since the start of 2011 and GM’s has fallen by $3 per share since its 2010 IPO. Earlier sales could have reaped more for the government. Later sales might as well, but “federal profit maximization was not the main purpose of the AIG or GM rescues.” The Post thinks it is time for the government to sell its remaining shares. GM and AIG should each be required to again compete as a private enterprise.

The federal government still owns a quarter of GM’s common stock and over 90% of AIG. These purchases and other bailout measures saved both the automaker and the insurer. Some may urge the U.S. Government to hold its shares until a better market arrives. AIG’s stock price has fallen 25% since the start of 2011 and GM’s has fallen by $3 per share since its 2010 IPO. Earlier sales could have reaped more for the government. Perhaps later sales could too, but “federal profit maximization was not the main purpose of the AIG or GM rescues.” The Post thinks it is time for the government to sell its remaining shares. GM and AIG should each be required to again compete as a private enterprise.

“The monarchy is about to embark on the greatest experiment in social mobility in its modern history.” Kate Middleton comes from the “first genuinely middle-class family to marry an heir to the throne.” Will her marriage to Prince William work? Will she suffer snobbery? Or will this marriage prove that the “big society” touted by Prime Minister David Cameron can work? The British are glued to the event for reasons that have “everything to do with what we are, how we got here and where we are going.”

“The monarchy is about to embark on the greatest experiment in social mobility in its modern history.” Kate Middleton comes from the “first genuinely middle-class family to marry an heir to the throne.” Will her marriage to Prince William work? Will she suffer snobbery? Or will this marriage prove that the “big society” touted by Prime Minister David Cameron can work? The British are glued to the event for reasons that have “everything to do with what we are, how we got here and where we are going.”

A U.S. debt downgrade is “likelier than not.” Rating agency Egan-Jones placed the U.S. on a negative watch over a month before S&P generated uproar with its lower outlook. Moreover, Egan-Jones Ratings has a better track record. It foresaw corporate problems that other agencies missed or ignored. The extent of the Egan-Jones action should be worrying for the federal government. “On March 1, Egan-Jones put the U.S. government’s triple-A rating on negative watch—a further step down the credit ladder from a negative outlook. It means a downgrade to double-A-plus is more likely than not.”

A U.S. debt downgrade is “likelier than not.” Rating agency Egan-Jones placed the U.S. on a negative watch over a month before S&P generated uproar with a lower outlook. Moreover, Egan-Jones Ratings has a better track record. It foresaw corporate problems that other agencies missed or ignored. The extent of the Egan-Jones action should be worrying for the federal government. “On March 1, Egan-Jones put the U.S. government’s triple-A rating on negative watch—a further step down the credit ladder from a negative outlook. It means a downgrade to double-A-plus is more likely than not.”
http://online.barrons.com/article/SB50001424052970203583604576271080879008522.html?mod=BOL_twm_mw

The Pension Benefit Guaranty Corporation (PBGC) receives small premiums from corporate pension plans. In return PBGC ensures that workers receive their benefits even if their employer goes bankrupt. Congress needs to raise these premiums to put “the corporation on more solid footing.” Doing so will protect the 44 million Americans covered by company pension plans “and spare taxpayers another costly bailout.”The Pension Benefit Guaranty Corporation (PBGC) receives small premiums from corporate pension plans. In return PBGC ensures that workers receive their benefits even if their employer goes bankrupt. Congress needs to raise these premiums to put “the corporation on more solid footing.” Doing so will protect the 44 million Americans covered by company pension plans “and spare taxpayers another costly bailout.”

Time will include Dr. Takeshi Kanno in its list of the 100 “most influential people in the world.” When the tsunami alert sounded, the doctor “immediately began moving patients to the highest floor, helping dozens of people in the short window between the 9.0-magnitude quake and the deadly wave.” He remained at his post in Minami Sanriku treating patients until the survivors could be evacuated from the stricken Shizugawa public hospital. After three days he rejoined his wife for the birth of their second child. They named the boy Rei, which means “the wisdom to overcome hardship,” a trait Dr. Kanno exemplified during the disaster.

The Journal argues that the Federal Reserve should act more as a global central bank. “The dollar is the world’s reserve currency…. Yet for at least a decade, and especially since late 2008, the Fed has operated as if its only concern is the U.S. domestic economy.” The result has swamped countries trying to battle inflation with huge capital inflows. Domestic repercussions will also emerge. The Fed has single-mindedly expanded the money supply to stimulate the economy. “The bill is coming due in a weak dollar, food and energy inflation, and the decline of U.S. economic credibility.”

African countries welcomed China with open arms. Supplying over a third of China’s oil, Africa’s largest trading partner is now China. Good will, however, is in shorter supply. Africans are accusing China of “ripping them off.” Tension arises from the poor, often dangerous, working conditions provided by some Chinese employers. The shoddy construction of some pledged public works generates more complaints. The Economist reports a “Chinese-built road from Lusaka, Zambia’s capital, to Chirundu, 130km (81 miles) to the south-east, was quickly swept away by rains.” In the capital of Angola, “cracks appeared in the walls” of a Chinese-built hospital “within a few months and it soon closed.” Trade is still booming, but suspicions are growing.